retail news in context, analysis with attitude

• Target said yesterday that its Q1 neat earnings were $418 million, down from $498 million during the same period a year earlier, on sales that were up 2.1 percent to about $17 billion. The company said, according to USA Today, that "the massive data breach it sustained over the holiday season last year cost the company a net $18 million in the first quarter – $26 million in expenses offset by an $8 million insurance claim."


Reuters reports that Netherlands-based retailer Ahold has agreed "to pay $297 million to settle U.S. class-action litigation accusing its former U.S. Foodservice distribution unit of defrauding thousands of hospitals and restaurants through overcharges … According to the lawsuit, U.S. Foodservice used shell companies, sham transactions and phony invoices to inflate prices it charged 'cost-plus' customers from 1998 to 2005. With Ahold's approval, the shell companies pretended to buy and then resell food to U.S. Foodservice at a higher 'invoice cost,' which would be passed on to customers, the lawsuit said."

The story notes that Ahold "remained liable even after selling U.S. Foodservice, now known as U.S. Foods, in 2007 to a group led by private equity firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts. The settlement came after the U.S. Supreme Court on April 28 refused to hear U.S. Foods' appeal of the class action, which covered about 75,000 customers."


• Southern California's three major supermarket chains - Kroger-owned Ralphs, Safeway-owned Vons, and Albertsons - said yesterday that they have reached a tentative agreement with seven United Food and Commercial Workers (UFCW) locals there on a new collective bargaining agreement. Details have not been divulged, pending member ratification.


• The Associated Press reports that "more than 100 protesters were arrested after crossing a barricade outside McDonald’s headquarters in Oak Brook, Ill., on Wednesday during demonstrations to call attention to the low pay earned by fast-food workers. The actions come ahead of the company’s annual shareholders’ meeting on Thursday. Demonstrators were demanding a minimum wage of $15 an hour and the right to unionize."


• Albertson’s LLC said yesterday that it has committed $12.5 million over 15 years to Boise State University for the naming rights to the school’s famous stadium. The agreement secures Albertsons Stadium through 2028, subject to approval by the Idaho State Board of Education on June 18. This is a first for both Boise State’s stadium and for Albertsons.
KC's View: